Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Could you answer this question please. Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook: Polymerco,

Could you answer this question please. image text in transcribed

Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook: Polymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the table below. There current sales are to North American customers only. The president casually mentions that it would be nice to have more offshore sales to diversity the company Polymerco Income Statement This year ($000) Last year ($000) Gross sales 26683 24762 Bad debt nil nil Net sales 26683 24762 COGS 22,243 21,341 Contribution margin 4440 3421 CM(%) 16.6% 13.8% SG&A 2,122 2,067 Operating income 2318 1354 Other income and interest on long-term -60 -50 debt Net income 2258 1304 (a) if Polymerco's production is running at 84% capacity, what is the maximum discount in percentage that you can provide? Maximum discount= % In this case, will you have a negative impact on the profitability of the business? No. (b) if Polymerco's production is running at 100% capacity, how much percentage of discount can you provide without reducing the profitability? %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Framework For Internal Auditings Entity Wide Opinion On Internal Control

Authors: Wanda A. Wallace, Thomas White

1st Edition

0894135317, 978-0894135316

More Books

Students also viewed these Accounting questions

Question

The claim of p Answered: 1 week ago

Answered: 1 week ago